• Economic and Environmental Geology
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• v.41 no.5
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• pp.551-562
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• 2008

Option pricing model in finance has been applied to price non-financial options, called real options. The real option valuation method is ideally suited to irreversible decision making under uncertainty, including the need to determine the optimal time to act and even change between alternative courses of action as information is collected. Therefore, the real option valuation method is expected to provide a superior and less subjective approach to determining optimal strategies for water resources supply projects, which have been reported to have huge risks due to uncertainties, and investors and policy makers need to build an optimal strategy - when and if to invest - with uncertainties and managerial flexibilities considered.

• Journal of Korea Port Economic Association
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• v.29 no.1
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• pp.67-76
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• 2013

It has been more than four years since the outbreak of global financial crisis. However, the world economy continues to be challenged with new crisis such as the European debt crisis and the fiscal cliff issue of the U.S. The global economic environment remains fragile and prone to further disappointment, although the balance of risks is now less skewed to the downside than it has been in recent years. It's no wonder that maritime business will be bearish since the global business affects the maritime business directly as well as indirectly. This paper, hence, aims to predict the Baltic Dry Index representing the shipping business using the ARIMA-type models and Hodrick-Prescott filtering technique. The monthly data cover the period January 2000 through January 2013. The out-of-sample forecasting performance is measured by three summary statistics: root mean squared percent error, mean absolute percent error and mean percent error. These forecasting performances are also compared with those of the random walk model. This study shows that the ARIMA models including Intervention-ARIMA have lower rmse than random walk model. This means that it's appropriate to forecast BDI using the ARIMA models. This paper predicts that the shipping market will be more bearish in 2013 than the year 2012. These pessimistic ex-ante forecasts are supported by the Hodrick-Prescott filtering technique.

• The Journal of Asian Finance, Economics and Business
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• v.7 no.7
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• pp.531-541
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• 2020

The purpose of the study is a theoretical and practical justification for building a mechanism for financing health facilities based on public-private partnerships from a pension fund in regions with environmental problems. The theoretical background is built on works of local and foreign authors on state and non-state pension provisions issues, pension funds' assets management. This study provides an analysis of the health status of the population of the Kyzylorda region; it analyzes also the worldwide and Kazakhstan practice of investing pension funds and implementing projects. There has been legislative and methodological framework for financing health projects based on public-private partnerships in Kazakhstan. The scientific methods considered in this study made it possible to develop a mechanism for financial support for the modernization of a healthcare facility using the budget of pension funds. The authors point out possible risks in the implementation of projects in the field of healthcare and make recommendations on the construction a mechanism for financing healthcare facilities in the regions of Kazakhstan with environmental problems. In addition, they underline the key insights of the analysis, which are requisites for identifying the profitability of project for business and social effects for the public. Factors influencing efficacy, effect and implementation risks identified.

• Journal of the Korea Institute of Building Construction
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• v.19 no.6
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• pp.529-538
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• 2019

Typhoons can cause significant financial damage worldwide. For this reason, states, local governments and insurance companies attempt to quantify and mitigate the financial risks related to these natural disasters by developing a typhoon risk assessment model. As such, the importance of typhoon risk assessment models is increasing, and it is also important to reflect local vulnerabilities to enable sophisticated assessments. Although a practical study of economic losses associated with natural disasters has identified essential risk indicators, comprehensive studies covering the correlation between vulnerability and economic loss are still needed. The purpose of this study is to identify typhoon damage indicators and to develop evaluation indicators for typhoon damage prediction functions, utilizing the loses from Typhoon Maemi as data. This study analyzes actual loss records of Typhoon Maemi provided by local insurance companies to prepare for a scenario of maximum losses. To create a vulnerability function, the authors used the wind speed and distance from the coast and the total value of property, construction type, floors, and underground floor indicators. The results and metrics of this study provide practical guidelines for government agencies and insurance companies in developing vulnerability functions that reflect the actual financial losses and regional vulnerabilities of buildings.

• Journal of Korea Trade
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• v.24 no.4
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• pp.71-94
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• 2020

Purpose - Multi-National Enterprises (MNEs) tend to face a high level of institutional pressures in regions with high institutional development level. When complying with institutional pressures, firms try to make decisions to maximize profit while minimizing the risks to them. The purpose of this study is to investigate the influence of the institutional development level on institutional compliance timing by MNEs and the relationship between compliance speed and corporate performance. Design/methodology - The research focuses on three main variables, which are the institutional development level (as a determination of the institutional pressure level), the firm's compliance speed (as a determination of the compliance timing), and the firm's financial performance (as a determination of the corporate performance). We collected 19,869 firm-level data from CSMAR (the China Stock Market and Accounting Research), 6,922 CSR data from RKS (the Rankins CSR Ratings), and province and city-level data from the NERIM (National Economic Research Institute Index of Marketization) and NBSC (National Bureau of Statistics of China). The firms in China were chosen for analysis, and the analysis period was from 2008 to 2017. Random Effects GLS Regression was used to test the relationships among the variables. Findings - This study examined the effect of the institutional development level on the firm's compliance speed, together with the effect of compliance speed on the firm's financial performance of the MNEs in China. We found that the institutional development level positively influenced firms' financial performances, which means the firms' financial performances are better in the region with a high institutional development level. The compliance speed of institutional practice by firms was faster in the higher level of institutional development. However, the firm's delayed compliance led to better financial performance. Originality/value - Studies in the resource dependence view of Institutional Theory often fall short in understanding the theory by overlooking the firm's active decision-making. Thus, the findings do not present a full scope of corporate performance in this regard. This study not only found a way to test the role of a firm's independent decision-making (i.e., compliance timing) when facing the institutional pressure but also prove the significant role of the compliance timing on corporate performance. Also, we were able to test the effect of institutional development level, controlling location-specific variables because we used CSR performance data for MNEs operating in China. Lastly, by doing the above, the findings of this study suggest practical implications to the industry practitioners in MNEs.

• Land and Housing Review
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• v.10 no.4
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• pp.31-39
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• 2019

Singapore, a city state with less than 6 million population, has continued successful cooperative development and become one of the most successful Asian countries in exporting expertise in urban and real estate development. This research aims to analyze Singapore's cooperative development with socialist countries including China and Vietnam from Singapore's perspective as an investor. For cooperative development projects in China, Singapore adopted Singapore-style physical urban planning concepts as well as its own institutional and administrative systems. Singapore-Vietnam cooperative development managed to acquire profitable land and diversify its portfolio in terms of industry types and rents. This made Singapore's industrial parks more competitive than other parks in Vietnam. By showcasing successful project implementation in China and Vietnam, Singapore has proved that its model for industrial park and urban development is transferable. Singapore's success in cooperative development with socialist countries provides important implications for future cooperative development between South and North Korea. For example, phased development approaches starting from individual industrial parks expanding to mixed-use townships will be very useful to realize sustainable urban planning in North Korea and reduce financial risks. Singapore dominated development opportunities in advance when socialist countries opened their economy. To pattern ourselves after Singapore, we should not only improve our relationship with North Korea but also prepare with practical components such as financing and organizational structure.

• Journal of Information Processing Systems
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• v.18 no.5
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• pp.637-649
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• 2022

Investors aim to increase their profitability by investing in the stock market. An adroit strategy for minimizing related risk lies through diversifying portfolio operationalization. In this paper, we propose a six-step stocks portfolio selection model. This model is based on data mining clustering techniques that reflect the ensuing impact of the political, economic, legal, and corporate governance in Mongolia. As a dataset, we have selected stock exchange trading price, financial statements, and operational reports of top-20 highly capitalized stocks that were traded at the Mongolian Stock Exchange from 2013 to 2017. In order to cluster the stock returns and risks, we have used k-means clustering techniques. We have combined both k-means clustering with Markowitz's portfolio theory to create an optimal and efficient portfolio. We constructed an efficient frontier, creating 15 portfolios, and computed the weight of stocks in each portfolio. From these portfolio options, the investor is given a choice to choose any one option.

• Strategy21
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• s.41
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• pp.174-207
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• 2017

Human history shows diverse strategies for survival and prosperity. This study introduces the concept of the expansion of wealth as a key to explain choice and behavior of political entities. American scholar, -Bruce Bueno de Mesquita-, offers theoretical grounds for this concept in that the cores of selectorate theory is settled. The political entity consists of two groups, -the winning coalition that has power to replace leader and non-winning coalition that has not. Leaders implement policies serving for the welfare of winning coalition in return for their loyalty. Both internal problems caused by demographic changes and external ones of climate changes, epidemic disease, or invasion compel leader and winning coalition to adopt policies of expansion that they believe may lead to the acquisition of wealth needed to counter those problems. The process starts by occupying one spot where other entities reside and then connecting it to its own. The line between spots functions as a foothold to form a new line to other spots. By repeating this process, a space is created in which new laws and orders are instated. In the early stage of expansion, war is hardly avoidable. Once finished successfully, the political circumstance tilts to encourage economic activities in order to generate national revenues to strengthen political power of winning coalition. However, as scale of economic activities grows, so does political power of civic classes in production and trade. To gain financial support required to run the political entity, delegation of power or bestowing autonomy to non-winning coalition is inevitable. Thus, expansion is not the ultimate solution, only to prolong the political survival if succeed. Maritime power came to attractive option when overland expansion had become obstructed. It offered much greater advantages in terms of political risks and financial burdens in exploring new regions of precious commodities than overland expansion. Each political entity around world have been, for the first time in human history, connected by maritime means since 15th century. It is worthy of noting that land conditions propelled people out to sea. Political and economic situations created opportunities to exploit geographical position in pursuit of wealth. In the 21st century, we witness the operation of international winning coalition that presides over the rules of expansion. Competing for market is synonymous to the expansion in this era, the cause and aim of it has not been changed though. Energy and dollars are key factors of expansion since the end of the 2nd world war. No matter what the forms and conditions change, naval power is still the most relevant means for expansion as it retains unique characters of maneuver, flexibility, continuity, display and projection of power. The strategy for using naval power should be in line with two different approaches for expansion: Approaches to the international winning coalition by making contribution to world order, and approaches to the non-international winning coalition by enhancing military diplomatic activities. The former will serve our share of winning coalition while the latter will open chances to acquire further prosperity.

• KDI Journal of Economic Policy
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• v.25 no.1
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• pp.99-145
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• 2003

Quasi-fiscal activities (QFAs) refer to those activities that public corporations carry out to achieve policy objectives of the government. QFAs often lead to the understatement of the government involvement in the economy and the overstatement of its financial balance, thereby lowering fiscal transparency and hiding fiscal risks. Central banks, as public corporations, perform various QFAs in many countries. I define QFAs in this case as those activities that are not directly related to the intrinsic function of central banks, whose responsibility lies in the administration of monetary policy and the provision of banking services for the government and commercial banks. In Korea, the Bank of Korea (BOK) has been an active source of QFAs. Of particular importance are the policy loans to commercial banks to promote their lending to small- and medium-sized enterprises and others. The outstanding stock of policy loans increased rapidly in the aftermath of the recent economic crisis, and stood at 7.6 trillion won (20 percent of the reserve money) at the end of 2002. Another important QFA by BOK stems from the transfer of part of its profits to the central government. The accumulated transfer during 1998-2002 amounted to 9.9 trillion won. My calculation shows that if these and other QFAs had been carried out by the government as explicit fiscal activities, the consolidated central government financial balance would have been below the actual balance by about 0.5 percent of GDP in each year since the economic crisis. It is suggested that the QFAs by BOK be reduced in coming years not only to enhance fiscal transparency but also to expand the flexibility of BOK's reserve management. Abolishing policy loans and minimizing transfers to the government would be the first step in this direction. BOK should also consider paying interest on the government deposit held in BOK.

• The Korean Journal of Applied Statistics
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• v.24 no.2
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• pp.293-305
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• 2011

The volatility is one of most important parameters in the areas of pricing of financial derivatives an measuring risks arising from a sudden change of economic circumstance. We propose a Bayesian approach to estimate the volatility varying with time under a linear model with ARMA(p, q)-GARCH(r, s) errors. This Bayesian estimate of the volatility is compared with the ML estimate. We also present the probability of existence of the unit root in the GARCH model.